Non-resident investors find Canada’s real estate markets so nice they’re buying it twice… or thrice, sometimes more. Data from the Canadian Housing Statistics Program (CHSP) shows substantial non-resident homeownership. Not new, but what is surprising is the share of non-residents, who have income tax obligations in another country, that owned multiple homes in 2020. Over 1 in 10 non-resident homeowners across Canada owned at least two properties.
Over 1 in 10 of Canada’s Non-Resident Homeowners Own Several
Canadian real estate’s investment boom attracted significant non-resident ownership. About 3.5% of homeowners in Canada were non-resident owners, that’s roughly 340,735 owners. Over 1 in 10 (10.2%) of those non-resident owners held multiple properties in the same region. As we stated before, multiple properties can be rentals, AirBNB, vacation homes, or house-shaped safety deposit boxes. In any case, this was more demand contributing to higher prices.
It might not sound like much to the average person, but it’s a huge number that can have a significant impact on price. Even one-point of excess demand can drive prices higher, as it competes with end-user. Marginal buyers, especially deep pocketed ones, can bid up prices quickly, setting comps. It doesn’t take much, as we’ve explained with money laundering.
Non-Resident Investment Isn’t Just A BC or Ontario Issue, Nova Scotia and New Brunswick Are Feeling It Too
The CHSP is still wrangling data and includes 5 provinces and 2 territories at this point. It might not be a full picture, but it’s enough to show this isn’t just a Toronto or Vancouver issue. Just over 1 in 8 (13.8%) of Nova Scotia’s non-resident homeowners owned multiple properties. The province leads when it comes to the share of its non-residents that are investors.
Over 1 In 10 Non-Resident Homeowners Bought Multiple Homes In Canada
The share of non-resident homeowners that owned at least two homes in Canada.
Source: Canadian Housing Statistics Program; Better Dwelling.
New Brunswick followed with 12.0% of its non-resident owners holding multiple properties. We finally see Ontario in third with 10.2% of its non-residents, rounding out the top 3.
BC and Ontario Have The Most Non-Resident Real Estate Investors
As you might expect, bigger markets had the highest volumes — being high volume markets, and all. Ontario had 187,325 non-resident homeowners in 2020, and 19,120 (10.2%) owned multiple properties. BC is next with 88,670 non-resident homeowners, of those 7,775 (8.8%), owned multiple properties.
Non-Resident Homeowners With Multiple Properties In Canada
The number of non-resident homeowners with at least two homes in Canada.
Source: Canadian Housing Statistics Program; Better Dwelling.
The merit of non-resident ownership is debatable, since increased demand helps drive prices. Not exactly everyone is upset with the recent price boom, with many cheering it on. However, it’s naive to say non-resident home buyers aren’t a market force. It’s one degree from nonsensical gibberish when 1 in 10 own multiple properties.
In addition to demand and marginal pressures, time distribution needs to be considered. Had the share of non-resident purchases been over decades, it may not have been as noticeable. Data shows the surge was a recent phenomenon, and Canada’s non-resident ownership is particularly concentrated in new reconstruction.
It’s worth noting that non-resident ownership isn’t the sole cause of higher prices, but a symptom. Any commodity market that presents a profit opportunity will attract investors. If you think Canadian home prices will always rise, you should expect them. Eliminating non-resident buying like the Federal Gov is suggesting, also doesn’t eliminate this problem. It just means domestic speculators get the home field advantage, and foreign investment will need to restructure.
